DBS analyst Ken Shih maintained a Buy rating on China Life Insurance Co (CILJF – Research Report) today and set a price target of HK$19.00.
Ken Shih has given his Buy rating due to a combination of factors including China Life Insurance Co’s robust financial performance and strategic investment decisions. The company reported a significant increase in its FY24 value of new business (VNB) and net profit, which aligns with market expectations. A key driver of this performance was a substantial rise in gross investment income, supported by a yield of 5.5%.
China Life’s strategic focus on participating products and prudent asset allocation has enabled it to effectively navigate a low interest rate environment. The insurer’s investment strategy, which includes a higher allocation towards long-duration government bonds and high-dividend yield stocks, has provided stable recurring yields. This stability allowed China Life to increase its equity allocation during market volatility, contributing to its positive outlook. Despite some challenges, such as industry-wide cuts in long-term investment return assumptions, China Life’s efforts in asset-liability management and improving bancassurance margins are expected to drive further growth.
Shih covers the Financial sector, focusing on stocks such as AIA Group, Manulife Financial, and BlackRock. According to TipRanks, Shih has an average return of 15.2% and a 68.52% success rate on recommended stocks.
In another report released on March 28, CMB International Securities also maintained a Buy rating on the stock with a HK$20.00 price target.